Following a thematic inspection of investment firms, the Central Bank issued an industry letter setting out its findings. In particular the Central Bank found that whilst firms are generally cognisant of the MiFID client categorisation requirements and have the necessary policies and procedures around client categorisation, some firms had not correctly implemented these requirements in practice. The Central bank requires all MiFID regulated firms to undergo a review of its client categorisation policies and procedures and take any necessary action to ensure compliance with MiFID in light of the Central Bank's letter to industry. This review and any subsequent actions are to be completed by the firm and then discussed and minuted by the Board before 31 December 2015.

The European Supervisory Authorities (ESAs) launched a second consultation on draft Regulatory Technical Standards (RTS) outlining the framework of the European Market Infrastructure Regulation (EMIR). These draft RTS prescribe the regulatory amount of initial and variation margin that counterparties should exchange as well as the methodologies for their calculations. In addition, these draft RTS outline the criteria for the eligible collateral and establish the criteria to ensure that such collateral is sufficiently diversified and not subject to wrong-way risk. The consultation runs until 10 July 2015.

ESMA issues Q1 risk dashboard for securities markets

The European Securities and Markets Authority (ESMA) issued its second Risk Dashboard 2015 for the EU's securities markets, covering the first quarter of 2015 (1Q15). EU systemic stress remained at previous levels. Contagion, liquidity, and credit risk remained high but stable while market risk increased.

ESMA issues final MiFID standards on authorisation, passporting and registration of third-country firms

The European Securities and Markets Authority (ESMA) published its Final Report on MiFID II-MiFIR draft technical standards (RTSs) on authorisation, passporting, registration of third country firms and cooperation between competent authorities. This Final Report covers the majority of the draft RTS and ITS on investor protection topics which ESMA is expected to develop. The remaining draft technical standards ESMA is mandated to develop under MiFID II and MiFIR will be published by the end of 2015. The final report is submitted to the Commission for endorsement of the draft RTS and ITS. The European Commission has three months to endorse the standards.

ESMA delays CSDR technical standards

The European Securities and Markets Authority (ESMA) published a letter informing the European Commission of its intention to delay its draft technical standards (TS) for the Central Securities Depositories Regulation (CSDR) to September 2015. The initial delivery date of the CSDR TS was 18 June 2015.

EBA presents advice on criteria and capital treatment for securitisation

The EBA presented its recommendations on an EU framework for qualifying securitisations at a public hearing in London. The European Commission had requested in 2014 the EBA to advise on criteria for identifying a prudentially sound securitisation market and its regulatory treatment. The EBA will deliver the opinion to the European Commission in early July. The hearing was intended to give advance information of its findings to market participants. The recommendations presented included: to carry out a holistic review of the regulatory framework for investment products; to create a framework for 'qualifying' securitisations; criteria for defining 'qualifying' term securitisations and ABCP securitisations; and re-calibration of the BCBS 2014 framework applicable to ‘qualifying’ securitisation positions.

ECB successfully launches TARGET2-Securities

T2S, a platform that will enable integrated securities settlement across Europe, was successfully launched. Four securities depositories and their users are now connected to T2S: the Bank of Greece’s depository for government bonds (BOGS); the depository of the Malta Stock Exchange; Romania’s Depozitarul Central; and SIX-SIS of Switzerland. Italy will be next on 31 August 2015. Three more groups of markets will follow in stages, and the full complement, covering a total of 21 European countries, will have migrated by February 2017. Managed by the Eurosystem and operating in central bank money T2S will cut the cost of securities settlement and facilitate liquidity and collateral management.

Commission asks Member States to terminate their intra-EU bilateral investment treaties

European Commission has initiated infringement proceedings against Member States (Austria, the Netherlands, Romania, Slovakia and Sweden) to bring the intra-EU Bilateral Investment Treaties between them to an end.

Agreement on the proposal for a regulation on reporting and transparency of securities financing transactions (known as SFTR)

The SFTR aims to increase the transparency of certain transactions in the shadow banking sector to avoid that banks circumvent other rules by moving those activities to the shadow banking sector. The Commission, the European Parliament and the Council of the EU announced that they have reached common ground on the regulation. However, the agreed upon text was not published. The final text and formal adoption of the proposal are expected later this year.

Emphasising that MIFID2/MIFIR is the most significant and voluminous piece of Level 2 regulation that ESMA has ever undertaken Maijoor focused on the three areas receiving the most attention from stakeholders; non-equity transparency, commodity derivatives and the ancillary activity test for non-financial entities.